Michelle M. Huhnke is a partner with the Sugar Felsenthal Grais & Helsinger LLP law firm in Chicago and New York, focusing her practice on estate planning, charitable planning and wealth preservation. She works with clients and families to develop estate plans that address varied family circumstances and include efficient estate, gift and generation-skipping tax planning.
As an expert in this arena, Huhnke frequently teaches and speaks on estate planning, tax and exempt organization issues and soon will launch a regular column on Financial Poise. She’ll write about topics ranging from the fundamentals of estate planning to minimizing estate and gift tax problems using advanced techniques, including leveraged and discounted gifts and various gift trusts. She’ll also look at how different charitable giving strategies can foster family philanthropy and maximize the income, estate and gift tax benefits of giving. Below we chat with Huhnke about her background and why she finds these complex issues so interesting.
When I was a paralegal and later in law school, I assumed I would be a litigator. Fortunately, I happened to take a trusts and estates class at the same time I was working part-time for the estate planning group at my first firm. The practice appealed to me because of the strange and tricky intersection of families and money, but mainly because it combines the basic task of helping people with the need to perform technical tax and legal work at a high level. For a variety of reasons, clients are sometimes not avid to do their estate planning. When we can guide them through the process and solve problems in a way that gives them security for their family, it’s rewarding.
No, our firm has a very active practice in estate and trust administration. “Estate administration” is essentially the legal and tax process that occurs after a death, whereas the term “trust administration” refers to the management and administration of trusts over years, decades or even generations. Understanding these practices is critical to being a good estate planner. You can’t write effective estate planning documents unless you understand the nuts and bolts of how it works on the other side. Estate administration is necessarily a challenging practice because of what our grieving clients are going through. We work to get the legal part out of the way as promptly and constructively as possible.
Also, I have always practiced in the areas of charitable planning and representing exempt organizations. These areas blend well with an estate planning and tax practice. Many of our clients, both wealthy and less wealthy, are focused on making donations and establishing charities to take on public problems. Of course, the bottom line of charitable planning is often securing an income, estate, or gift tax deduction for the client. But more than that, we’ve seen many times that parents who teach philanthropy to their children can better instill their own values while nourishing the personal development of their kids. I relish helping clients accomplish their philanthropic goals in a way that maximizes the benefits, both tangible and intangible, to both parties.
It’s a really interesting time to be working in this field. The law of wills and trusts came from England when this country was settled, and was fairly stagnant for a long time. In the last 50 or 60 years, there have been numerous developments that address both social change and practical problems in estate and trust administration. Several decades ago, inheritance law changed so that adopted children are treated the same as biological offspring. In the last three years, same-sex spouses across the county have been achieving the property rights (among other rights) of traditional husband-wife couples. Right now the law has more previously unheard-of issues. For example, what if a child is both conceived to a couple and born after one of the spouses is dead? Or, how do you access a family member’s online financial records and social media accounts after death?
For a long time, the biggest unknown in our practice has been the estate tax. It is a very political tax. I’ve been an estate planner for 20 years and for all but a few of those, it has been changing or scheduled to change. Right now, the estate tax is fixed and it feels like that might remain steady. In the meantime, we planners are facing other challenges from Congress, Treasury and the IRS that we may have little control over. Our response is to stay current, educated and practical.
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